The crypto market has shocked everyone with a sudden dump, wiping out nearly $170 billion in value overnight. Amid this chaos, experts warn that the next 24 hours could reshape global markets. From Bitcoin to stocks, everything now depends on one key factor, fresh U.S. economic data and signals from the Federal Reserve.
The question is simple: will this spark the Q4 rally investors have been waiting for, or delay it yet again?
Stronger GDP Data, Lower Rate Cuts Possibility
The U.S. economy is running hotter than expected. Yesterday’s revised GDP numbers showed a 3.8% in Q2, above the 3.3% forecast. While strong growth looks good on the surface, it also means the Fed has less pressure to cut rates, and markets are desperate for those cuts.
Despite this, the CME FedWatch tool data suggests that there is an 87.7% chance of a rate cut in October. Because liquidity pressure is building, and even the smallest sign of easing could flip the market mood instantly.
PCE Data: The Real Game Changer
Today, the real turning point comes at 8:30 AM ET when the PCE inflation report is released. This is the Fed’s preferred inflation gauge, and it could set the tone for weeks ahead:
- A softer reading below 2.7% could boost hopes of cuts and fuel a rally.
- A higher reading may crush those hopes and trigger short-term panic.
And it doesn’t stop there. Four key Fed officials, including Vice Chair Barr, are scheduled to speak today. Their words could move markets as much as the data itself.
$23 Billion Option Expiry Today
Meanwhile, crypto traders just faced a nearly $23 billion options expiry, with $17.7B in Bitcoin and almost $5.3B in Ethereum. These resets often create sudden price swings as leverage unwinds.
With Bitcoin hovering near its “max pain” zone of $110K, volatility could explode in either direction.
Uptober or Uncertainty?
All of this is unfolding just days before October, historically one of Bitcoin’s best months with an average jump of 21%. If inflation data comes in soft and Fed officials hint at easing, we could see the start of a strong Q4 rally.
If not, markets may remain stuck in choppy waters until November.
